Grocery price inflation hit a record 16.7% in the four weeks to 22 January 2023 according to Kantar, the highest level since it started tracking the figure in 2008. Overall take-home grocery sales rose by 5.7% during the four week period and by 7.6% over the 12 weeks.
“Late last year, we saw the rate of grocery price inflation dip slightly, but that small sign of relief for consumers has been short-lived. Grocery price inflation jumped a staggering 2.3 percentage points this month to 16.7%, flying past the previous high we recorded in October 2022,” said Fraser McKevitt, head of retail and consumer insight at Kantar. “Households will now face an extra £788 on their annual shopping bills if they don’t change their behaviour to cut costs.”
Amid record inflation, supermarkets are seeking alternative ways to offer customers value. “Competition in the British grocery sector is as intense as it’s ever been as retailers strive to retain shoppers,” said McKevitt. “The grocers have been doing this by boosting their own-label ranges especially, with sales of these lines growing consistently over the past nine months. January was no exception as own-label lines grew by 9.3%, well ahead of branded alternatives which were up by just 1.0%.
“Across the market the move is towards everyday low pricing, with many supermarkets offering price matching and using their loyalty schemes to help shoppers save. As a result of this push, the proportion of spending on promotions has fallen to its lowest level since at least 2008 this month, exaggerating the usual post-Christmas drop off in deals.
“Aldi, Waitrose and Lidl’s efforts seem to have been particularly well received by shoppers. Our latest customer satisfaction data shows that Aldi scores best on pricing and overall value for money, while Waitrose stands out for knowledgeable staff, product quality and clean shops. Meanwhile, Lidl delivers on easy access to stores and on-shelf availability.”